Gaul bless America

France's government and film industry welcome Hollywood with open arms

PARIS -- Parlez-vous tax breaks? As the international film industry prepares for the aftermath of a catastrophic global financial crisis, the French film sector is thriving. The U.S. presence in Gaul is growing thanks to a new state tax break initiative and Hollywood studios are setting up powerful pied-a-terres in the Capital. Is the City of Lights on its way to outshining Tinseltown?

France's state film body the CNC pledged to invest 12 million euros ($15.43 million) more in the French film industry in 2009, a 2.3% increase from 2008. State aid for the export of national product will jump 18% next year. Because the CNC backing is based on a fiscal tax, the increase in funds is based on the 2007-2008 entertainment industry revenue and has not yet been affected by the global economic environment. "We have a very particular system in France that protects us more than in other countries," a spokesperson for the CNC said, adding that: "It's too early to tell if the 2010 budget will be affected."

2009's budget is already in place, but the 2010 budget risks being decreased if the entertainment sector is affected by the crisis. However, box office figures from the first nine months of the year are positive. While not quite over, 2008 has been a solid year for the French boxoffice with 139.27 million tickets sold from January through September, a 2.6% jump from the same period last year. French films took a 47.3% market share during the time period, compared to just 36.2% last year. With the boxoffice booming and Hollywood on its way across the French border, the future looks bright for Gaul's film biz.

France's Cultural and Finance ministries have outlined tentative plans to extend the country's 20% tax breaks for French films shot in the territory to all foreign films. After seeing many French films, like their Hollywood contemporaries, lured to Eastern European countries due to cheaper production costs, the French government created the "credit d'impots" tax write-off system four years ago to encourage local production. The system has proven to be effective among indigenous productions, with 120 French productions benefiting from such tax breaks in 2007. The state wants to extend the system to foreign films shooting in the territory in an effort to increase employment in the film sector by attracting more big-budget productions.

France's cultural minister, Christine Albanel, has been lobbying to put the new law in play and will present the new plan to French parliament in early December as part of the national finance plan. If approved, the tax break will go into effect on Jan.1, 2009. "I don't see why it would be opposed," General Director of the Ile-de-France Film Commission Olivier Rene Veillon says.

French Cultural Ministry's Head of Cinema Francois Hurard agrees: "The law has been very well-received since we announced it earlier this year. So far, no one has expressed a strong opinion against it."

The tax break is currently set at a minimum of 1 million euros ($1.29 million) with a ceiling of 4 million euros ($5.14 million). The tax breaks will be given only to productions that can prove that their scripts focus on French culture and heritage, and the amount of money given will be based on a point system similar to that of the current state aid system.

"The idea is to both make France more attractive for more important, big budget productions and also enhance the image of French culture, heritage and decor," Hurard explaines.

Foreign production currently represents only 5% of total audiovisual production in France, and a total of 50 - 70 million euros ($62.32 - $87.23 million) in spending, but the new law could see spending jump to between 200 and 250 million euros ($249.28 and $311.6 million).

France already has international treaties with more than 40 countries, but not the US since the treaties are signed on the state level. "The idea is to attract major U.S. productions who normally don't benefit from state aid," Veillon says. "It's really designed for Hollywood." The current plan stipulates a ceiling of 4 million euros ($5.14 million), but that may change before the law is put into place to accommodate mega-budget films.

But why film in Gaul when scenery comes cheap in places like Eastern Europe or Canada?

"France isn't a country where people come to film movies that they can film elsewhere; they come to film stories that take place in France," Film France's Deputy Director Franck Priot says. "We want people to come tell French stories in France."

However, with the economy crumbling, U.S. producers will need more incentives such as tax breaks in order to be convinced to cross the French border. Quentin Tarantino's "Inglorious Bastards" takes place in France, but Tarantino and his crew spent only two days shooting in France before filming in Berlin where production was cheaper. Universal and the Weinstein Co. are co-producing the project with local funding from German state subsidy body MDM.

"France is an extremely dynamic country in terms of filmmaking today. With all of the savoir-faire here, it's a shame that U.S. producers would be forced to shoot films in other places in Europe," General Director of Universal's French arm Stephane Huard says.

Like "Bastards," more and more American productions have been heading to Germany and the U.K. thanks to those countries' tax breaks, or to Eastern Europe to cut costs. The French government hopes the new tax break will bring those productions back to French soil.

"It will make us equal competitors with our friends in the U.K. and in Germany," Veillon says. "The paradox is that we were already attractive to foreign shoots even without the tax breaks."

U.S. productions have managed to squeeze in select scenes for projects despite the lack of financial incentive. Paramount Vantage shot parts of Jeffrey Nachmanoff's "Traitor" starring Don Cheadle in Marseille and Stephen Frears filmed "Cheri" for three weeks in Paris and the Basque country. Nora Ephron also shot scenes from her Julia Child biopic "Julia & Julia" starring Meryl Streep in Paris in June for Columbia Pictures. However, these films don't hold a candle to 2005's record year when "Da Vinci Code," "Marie Antoinette," "A Good Year" and "Munich" all filmed in the territory.

"U.S. producers will definitely shoot more here in France than before," Wild Bunch CEO Brahim Chioua says. Chioua predicts that the new law will lead American producers to hire French line producers to do on-site work, plus it will allow Gaul-based companies like Wild Bunch to snag early rights to the titles and thus reap financial benefits from the film's domestic and worldwide distribution.

"A big U.S. production represents both a lot of spending and also notoriety for the regions in which it's filmed," Priot declares. The biggest Hollywood productions in France between 2005 and 2007 spent between 10 and 20 million euros ($12.87 and $25.75 million) while filming. Hotel bills alone for films like "Marie-Antoinette," "Rush Hour 3" and "A Good Year" represented between 500,000 and 1 million euros ($643,932 and $1.29 million) in spending.

"The new law would be a godsend," "Merlin" line producer Renaud Mathieu says. "When foreign productions come to France now, it's more advantageous to bring their entire team over and feed them and lodge them than to employ a French crew. The new tax breaks will change that."

Film France hopes to lure U.S. screenwriting talent through the France Unlimited Access program in partnership with the WGA. The 100,000 euro ($124,302) program, launched on Nov. 6 in Paris and the South of France, will send 10 "A-list" American writers on an 8-day locations tour in order to encourage story ideas set in Gaul. Film France is hoping that the writers -- who include Michael Dougherty ("Superman Returns"), Rita Hsiao ("Toy Story 2") and John August ("Charlie and the Chocolate Factory"), among other studio-friendly scribes -- will convince their directors and studio producers to film in the country. The program is backed by the Ile-de-France Film Commission, the Alpes-Cote d'Azur Film Commission and the French Embassy in the US.

"I think the tax credit will make a huge difference," "Eagle Eye" says screenwriter Travis Adam Wright, whose "Harlem Hellfighters" will shoot in Gaul next year. "You can fake things for people who don't know, but if you can get the real thing, then it's incredible."

Hollywood directors and talent have already started to migrate across the Atlantic for the real thing. Kevin Kline will grace Gallic screens with a starring role as a French-speaking chess-playing doctor in Caroline Bottaro's drama "Joueuse" ("Queen to Play"). Jennifer Beals also plays a small role in the film, an adaptation of Bertina Henrichs' novel "The Chess Player" set to hit French theaters in February. Late director Sydney Pollack recently played a small role in Daniele Thompson's "Avenue Montaigne," France's pick for the 2007 Oscars. Julian Schnabel's "The Diving Bell and the Butterfly" was a hit at the 2007 Festival de Cannes and even earned its own Oscar nods that year.

The U.S. majors are also practicing their French as they up local production in the territory. Warner Bros. has been dabbling in French-made fare for over 11 years. Warner more recently released "La Fille de Monaco" in August and "Musee Haut, Musee Bas" at the end of October. The major is currently in production on Anne Fontaine's Coco Chanel biopic "Coco Before Chanel" starring Audrey Tautou and set for a Spring 2009 release, and "Amelie" helmer Jean-Pierre Jeunet's "Micmacs a tire-larigot" starring Danny Boon, which will hit Gallic theaters next Oct.

"To be international, be national," CEO of Warner Bros. France Francis Boespflug says. "I don't make English-language movies that resemble Hollywood productions. I make French movies in French for French audiences." Warner Bros. France's local production has proven to be profitable; the major's biggest box office success in history in the territory wasn't a U.S. import, but instead local French-language comedy "Les Bronzes 3" with 10.5 million tickets sold.

Warner France plans to produce 4-5 local titles next year, plus one or two acquisitions in addition to the 12-15 films coming from Warner Bros. stateside. "We've created a necessary balance between local production and international distribution, " Boespflug says. "To ignore France's national cinema which takes up 45% of the market and simply live on U.S. titles is unimaginable."

While Warner Bros. may have pioneered local French production among the U.S. majors, the other studios are following fast in its tracks. In 2006, Disney launched new France-based unit Disneynature earlier this year to produce and distribute documentary films about animals and the environment through at least 2012. Paramount released its first French-language title, "Magique!," in mid-October and plans to announce its next local investments in the coming weeks.

Universal opened shop in Paris in August and plans to produce two to three local films per year. All Working Title films are distributed by StudioCanal in France, so Universal is looking to add more local titles to its line-up in order to compete with other Gallic distributors. Universal's first French production will be Joann Sfar's Serge Gainsbourg biopic "Gainsbourg (vie heroique)," set for a March 2010 release. Universal's LA-based animation house Illumination has also pacted with French special effects company Mac Guff for a deal to develop animation projects in Paris. Illumination and Mac Guff are already in talks with the CNC to figure out a game plan that will be beneficial to all parties.

"If the new tax credit also apply to animated films, it will be very interesting for us," Huard says.

France has always referred to its cinema as "the 7th art form," but local creativity combined with alluring financial incentive may soon turn the country into a global filmmaking powerhouse.